Female directors on the board and cost of debt: evidence from Australia

Rakesh Pandey, Pallab Kumar Biswas, Muhammad Jahangir Ali and Mansi Mansi

Accounting and Finance, 2020, vol. 60, issue 4, 4031-4060

Abstract: We examine whether the presence of female board members has any impact on the cost of debt among Australian listed companies. We find that female presence on the board is negatively associated with the cost of debt. Most importantly, our findings support the argument of critical mass theory that a certain threshold of gender balance is required for enhancing board effectiveness. Our results are valid irrespective of alternate model specifications and endogeneity issues. Overall, the results provide support to the ASX Corporate Governance Principles and Recommendation for the appointment of female directors on corporate boards.

Date: 2020
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https://doi.org/10.1111/acfi.12521

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